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Reimbursing Preventive Care

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  • F. Barigozzi

Abstract

The paper focus on secondary prevention (diagnostic screening, medical examination, checks-up ) which refers to the early detection of disease. In particular secondary prevention in analyzed as an instrument of self-insurance: if illness occurs, the negative health shock decrease. Both the case in which secondary prevention and treatment are complementary goods, and that in which they are substitutes, are analyzed. Optimal reimbursement for prevention and treatment is derived when insurance uses a liner mechanism. Results show that, starting from a situation with no insurance, a linear contract always encourages treatment consumption whereas it may either encourage or discourage secondary prevention consumption. Prevention consumption is discouraged when the two goods are substitutes. In the former case, one of the two goods is taxed and the other is subsidized, while in the latter case the two goods are either both subsidized or taxed.

Suggested Citation

  • F. Barigozzi, 2001. "Reimbursing Preventive Care," Working Papers 403, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:403
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    Cited by:

    1. Francesca Barigozzi & Renaud Bourlès & Dominique Henriet & Giuseppe Pignataro, 2017. "Pool size and the sustainability of optimal risk-sharing agreements," Theory and Decision, Springer, vol. 82(2), pages 273-303, February.
    2. Francesca Barigozzi, 2006. "Supplementary Insurance with 'ex post' moral hazard: efficiency and redistribution," Annals of Economics and Statistics, GENES, issue 83-84, pages 295-325.
    3. Udo Schneider & Jürgen Zerth, 2011. "Improving Prevention Compliance through Appropriate Incentives: Theoretical Modelling and Empirical Evidence," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(I), pages 71-106, March.
    4. Ellis, Randall P. & Manning, Willard G., 2007. "Optimal health insurance for prevention and treatment," Journal of Health Economics, Elsevier, vol. 26(6), pages 1128-1150, December.
    5. Schneider, Udo & Zerth, Jürgen, 2008. "Improving prevention compliance through appropriate incentives," MPRA Paper 8280, University Library of Munich, Germany.
    6. Pannequin, François & Corcos, Anne & Montmarquette, Claude, 2020. "Are insurance and self-insurance substitutes? An experimental approach," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 797-811.

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